Google announced on Friday that it would invest $700 million in the business of telecom operator Bharti Airtel. A $300 million corpus would be invested over a five-year period on “mutually agreed commercial initiatives,” according to the tech giant.
A large part of this investment appears to be putting more affordable handsets in the hands of consumers. This money will be used to scale up a “range of devices to consumers via innovative affordability programmes,” according to Google. In its own press release, Airtel stated that the companies would collaborate with device manufacturers to lower “barriers” to smartphone ownership.
This money comes from Google’s $10 billion India Digitization Fund, which was announced in 2020.
Airtel may not end up stocking the phones it tries to get into its subscribers’ hands, however, the company’s India MD and CEO Gopal Vittal foreshadowed the Google investment last August. “We’re working with both OEM manufacturers, with Google, as well as with software developers to see how we play this game in the smartest way without taking inventory positions, without manufacturing our own device while still playing with the ecosystem at large,” Vittal had said.
The JioPhone is the most significant example of a telco aggressively investing in the handset ecosystem to improve revenues from mobile data; it is not a new idea to entice less wealthy customers to buy smartphones with financing plans. According to Vittal’s earlier comments, Airtel, unlike Jio, wants to enter this space without having to bear the cost of purchasing devices before selling them to customers.
Even e-commerce behemoth Flipkart tried out the concept a year ago, announcing Flipkart Smartpack as a way to entice customers to pay for bundled OTT platforms in exchange for a promise of a refund if they returned the phone within a year.
